Washington, D.C. – Today, U.S. Senator Catherine Cortez Masto (D-Nev.) signed onto a bipartisan letter led by Senators Elizabeth Warren (D-Mass.) and Roger Marshall (R-Kan.) to National Security Advisor Jake Sullivan and Brian Nelson, Under Secretary for Terrorism and Financial Intelligence at the Department of the Treasury (Treasury), raising concerns about reports that in the months leading up to their brutal October 7th terrorist attack on Israel, Hamas and Palestinian Islamic Jihad (PIJ) raised millions of dollars via crypto, evading U.S. sanctions to fund their operations. Cortez Masto and her colleagues are asking the Biden administration to provide information about how it plans to prevent crypto-financed terrorism.
“Between August 2021 and this past June, [Hamas and PIJ] raised over $130 million in crypto, and moved millions among each other, ‘with PIJ sending over $12 million in crypto to Hezbollah since 2023.’ As the Wall Street Journal reports, ‘[r]esearchers who study Hamas’s financing said crypto remains one of a number of tools the group uses to raise funds.’ Given the clear and present danger posed by the financing of these and other militant organizations, we ask the Administration to provide additional details on its plan to prevent the use of crypto for the financing of terrorism,” wrote the lawmakers.
The lawmakers noted that both the Israeli and U.S. governments have warned of the threat that crypto poses in the fight against terrorism, and Israel previously seized crypto assets from terrorist organizations, including Hamas and Hezbollah. Experts believe that only a small percentage of the overall crypto funds flowing through Hamas and PIJ have been captured.
“That the deadly attack by Hamas on Israeli civilians comes as the group has become ‘one of the most sophisticated crypto users in the terror-finance domain’ clarifies the national security threat crypto poses to the U.S., and our allies. Congress and this Administration must take strong action to thoroughly address crypto illicit finance risks before it can be used to finance another tragedy.”
The lawmakers are asking a set of questions about Treasury and the Biden administration’s plans to address the serious national security threats posed by crypto’s use to finance terrorism by October 31, 2023.
The text of the letter is available HERE.
As a member of the Senate Banking, Housing, and Urban Affairs Committee and a former Attorney General, Senator Cortez Masto has worked to crack down on the illegal use of cryptocurrency. She passed into law her bipartisan legislation to combat money laundering and terrorism by bolstering the Financial Crimes Enforcement Network (FinCEN) and ensuring it focuses on virtual currencies. She has also cosponsored the Digital Asset Anti-Money Laundering Act, which would close loopholes in current law and bring cryptocurrency companies into grater compliance with the anti-money laundering and anti-terrorism frameworks that govern much of the financial system.